Wedbush Downgrades Weight Watchers (WTW) to Neutral; Higher Marketing Spend To Offset Gross Margin Expansion
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Price: $331.59 -0.72%
Rating Summary:
15 Buy, 11 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
15 Buy, 11 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush downgraded Weight Watchers (NYSE: WTW) from Outperform to Neutral with a price target of $82.00.
Analyst, Kurt Fredrick, said, "Downgrade to Neutral as planned marketing increase offsets gross margin expansion from online growth. Management anticipates 2012 EPS of $4.20-4.60, excluding the impact of the share tender and repurchase discussed below, in line with the consensus estimate of $4.56. While guidance assumes revenue growth, largely due to 30-35% paid week growth in the online business, and gross margin expansion of 200-250 bps, this will be offset by a 200 bps increase in marketing spend to generate the increased sales and a 50 bps increase in G&A spend. Thus, operating margins are expected to be flat or down in 2012."
"We are raising our 2012 estimates for revenue to $1.937 billion from $1.900 billion, and for EPS, to $4.44 from $4.51, to reflect Q1 operational issues and increased marketing spend."
For an analyst ratings summary and ratings history on Weight Watchers click here. For more ratings news on Weight Watchers click here.
Shares of Weight Watchers closed at $79.34 yesterday.
Analyst, Kurt Fredrick, said, "Downgrade to Neutral as planned marketing increase offsets gross margin expansion from online growth. Management anticipates 2012 EPS of $4.20-4.60, excluding the impact of the share tender and repurchase discussed below, in line with the consensus estimate of $4.56. While guidance assumes revenue growth, largely due to 30-35% paid week growth in the online business, and gross margin expansion of 200-250 bps, this will be offset by a 200 bps increase in marketing spend to generate the increased sales and a 50 bps increase in G&A spend. Thus, operating margins are expected to be flat or down in 2012."
"We are raising our 2012 estimates for revenue to $1.937 billion from $1.900 billion, and for EPS, to $4.44 from $4.51, to reflect Q1 operational issues and increased marketing spend."
For an analyst ratings summary and ratings history on Weight Watchers click here. For more ratings news on Weight Watchers click here.
Shares of Weight Watchers closed at $79.34 yesterday.
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